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Important Issues related to Re-rolling mills in SME Sector

• satyendra
• June 1, 2017
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• Harsh environment, Knowledge enhancement, market, Mill association, Product certification, Product quality, Re-rolling mill, SME sector,

Important Issues related to Re-rolling mills in SME Sector

The steel sector in India consists of four branches namely (i) multi-million tons integrated steel plants, (ii) mini integrated steel plants, (iii) individual units of steel melting producing pencil ingots, and (iv) re-rolling mills which are rolling steel from billets, pencil ingots and scrap steel. Most of the units under last two categories are in small and medium enterprise (SME) sector. All the four branches which constitute the steel sector play a very important role in the steel economy of the country.

Re-rolling mills has a considerable contribution to the steel production of the country.  There are around 1800 re-rolling mills in SME sector in India. The rolling capacities of these mills are mostly in the range of 8,000 tons per year to 80,000 tons per year. On a very conservative estimate, these mills contribute more than 20 % of the total production of finished steel in the country. Hence, these mills play a very important role in supporting the steel economy of the country.

The conditions of the most of the re-rolling mills can be termed as not healthy. They operate with very old technologies and operate at low level of productivities and high level of energy consumptions. There are many problems and challenges associated with these mills.

Several agencies have carried out detailed studies of the steel and re-rolling units of SME sector. Some of these studies have identified certain barriers associated with these mills (Fig 1) which include (i) high energy consumption due to the use of obsolete technologies, (ii) lack of awareness and knowledge on several fronts, (iii) lack of proper operational procedures, (iv) a negative mind-set among owners of the mills, and (v) lack of finance to effect necessary changes in the production system. These agencies after their studies came out with many solutions for solving the problems of the units of this sector. The solutions suggested by these agencies are technologically very sound and can be termed as ideal solutions. But most of these solutions have not been implemented by most of the mills and the few small solutions which were implemented by some of the units are also not functioning well. This has happened since while suggesting the technically sound solutions for the mills, the agencies have not taken into consideration the environment in which these mills are presently functioning.

Fig 1 Barriers associated with the re-rolling mills in SME sector

There are several issues which are associated with the re-rolling mills in the SME sector. Some of these issues have positive orientations while the others have negative orientations. The positive with positive orientation help the re-rolling mills in surviving in those times when there exist adverse conditions for the mills. On the other side, the issues with negative orientation pull down the performance of the mills all the time. The need of the hour is that the issues which are negative to the performance of the mills are addressed so that the functioning of the mills is strengthened. It is in the interest of all the stake holders of the re-rolling mill units to ensure that they become stronger and healthier by building further on the strength of their positive issues.

Positive issues of the re-rolling mill units

There are several positive issues linked to the re-rolling mills of SME sector. These positive issues have seldom being highlighted by the agencies carrying out studies on these mills. Most of the studies done on these units have concentrated only on the negative issues for suggesting technologically sound solutions in attempt to solving the problems of the sector. Study of positive issues helps in determining the environment under which the rerolling mills are operating, which in turn helps in finding solutions to the problems which are acceptable to the mill owners, though these solutions may not be the technological ideal solutions. The positive issues connected with the re-rolling mills are enumerated below.

• The products of the re-rolling mills are oriented to meet the requirements of the local market. Steel qualities in which the products are rolled, sizes of the rolled product, and the size tolerances of the steel products all are tuned to fulfill the need of the local market.
• Since the mills are serving local market, each of the mills is having a narrow product range for serving a few preferred customers. Because of narrow product range, there is no down time of the mill during the rolling hours for switching over from one product to the other.
• The facilities installed at the local industry matches with the availability of the steel in the local market. Since the local industry is linked to local suppliers, they have a good control on the supplies of the steel product both with respect to quality as well as quantity.
• As the steel product is supplied to the local market, steel product is to be transported to only short distances. Shorter distance of transport results into lower landed cost of the steel product for the user. It also helps in the saving of the fuel needed for transporting the steel. Hence, this serves the cause of overall energy conservation.
• Since the re-rolling mills supply steel product on demand, the local industry need not carry high inventory of steel products. It helps the local industry in avoiding blocking of the funds on the raw material inventory.
• As the re-rolling mill is having low capacity, it does not have campaigns which need minimum tonnage to be rolled before change of section. This means that the mill need not carry high inventory of a product.
• The re-rolling mill cuts the rolled products in two alternative ways. The first way is to produce products of standard lengths and the second is to produce the product of assorted lengths. Due to this reason and with manual control of shearing, the mill has minimal loss of steel due to end cutting, thus improving the yield of the rolled product.
• In these re-rolling mills, the feeding of the bar in the roll stand is manual. Hence, there is a sharp drop in the tonnage of mis-roll. The mis-roll generation takes place only when there is power failure or when there is drop in the bar temperature due to some delay in the rolling of the bar. Further, the operator at the mill prefers to start at a higher temperature, so as to avoid generating mis-roll, in case there is small delay during rolling.
• Most of the mills are labour intensive units and hence they provide employment to a large number of people. The work force of these mills is highly experienced in their job and needs practically no supervision.
• Many of the small capacity re-rolling mills use scrap steel as starting material for rolling in place of pencil ingots or billets. These mills convert steel scrap directly into the finished steel product. Since this scrap steel has not been processed in the steel melting shop for the production of crude steel, it has resulted into (i) marked improvement in the yield of steel product from the scrap which improves from around 80 % – 82 % to around 95 %, (ii) savings in the requirements of raw materials such as fluxes, ferro-alloys, carburizer etc. needed during the production of crude steel, (iii) savings in the requirements of the utilities needed during the production of crude steel, (iv) savings in the requirements power needed during the production of crude steel, and (v) saving in the refractories which is a major consumable in the production of crude steel. Rolling of scrap into the steel product, not only serve the cause of steel recycling but it also helps towards the cause of the conservation of raw materials and energy as well as saving the generation of green-house gases. On a very conservative estimate, the re- rolling mills in SME sector are converting around 2.0 million tons of scrap steel in a year directly into the finished product without routing it through the steel making.

Negative issues of the re-rolling mill units

In addition to positive issues enumerated above, there are several issues which have negative influence on the working of the re-rolling mills in SME sector. These negative issues are the prime barriers which come in way of improving the performance of the re-rolling mills. These negative issues need those solutions which provide confidence to the mill owner that these solutions would in no way interfere with the positive issues linked to the re-rolling mills. The negative issues connected with the re-rolling mills are enumerated below.

• The re-rolling mills employ obsolete equipment and facilities. The technologies used in these mills are around 50 years to 60 years old.
• The practices employed in the mills are outdated. There is lack of knowledge about the developments which have taken place in the field of reheating of steel and hot rolling around the world. The mills need efficient methods of production.
• Many of the mills are operating 8 hours to 10 hours a day. This has a negative influence on the energy efficiency of the mills.
• There is resistance to change since mill owners fear that upgradation of technologies, equipment, and practices may have serious impact on the positive issues which are linked to these re-rolling mills. Also, since the mill owners have grown with the environment presently associated with the sector, there is inertia which is preventing them to go for change.
• There are shortage of resources available with the mill owner for investment in the equipment and technologies needed for the improving the performance of the mill.
• Mill owners are afraid of taking assistance from professionals since they fear that the professionals do not try to understand the real issues and always normally suggest cost intensive solutions.
• Mill owners are over stressed and working under time constraint since they are carrying out multi-task functions.
• The working environment existing in these mills is very harsh for the work force. Also there is lack of welfare facilities available in these mills.
• Much is desired with respect to housekeeping and cleanliness. There is lack of awareness that even the waste materials and iron and steel scrap can be a source of wealth.
• The testing and measuring equipment are mostly lacking and in the mills wherever they exist many of them are not in working conditions. Further, much is desired with respect to the upkeep of the testing and measuring equipment as well as the laboratory housing them.
• There is huge resistance for product certification because of fear that the certifying agency will ask for a lot of changes in the working practices and there will be substantial investment involved in the process.
• There is lack of standardization. The systematic practices for data recording and analyzing are not available in these mills. Further, there is no desire to have these practices.
• There are very little efforts regarding use of information technology both for upgrading of the knowledge base as well as for systematizing of the procedures.
• There is practically very little attempt for enhancing the knowledge base of the work force for improving their productivity.
• The vision for the future is lacking. There are no objectives and targets for the future. Planning for the future is also missing.

Steps needed for overcoming negative issues

The negative issues are deteriorating the performance of the re-rolling mills very fast and there is question mark with respect to the long term survival of the mills. The present environment is such that the suggested solutions which are sound technically are not acceptable to the mill owners because of several reasons. Hence, the approach required for the overcoming of the negative issues is to be different than the normally followed approach. In the present atmosphere, the right approach needs to be towards confidence building and the knowledge enhancement of the mill owners. This is required to be done to such a level, that the mill owners themselves should realize that the implementation of technical sound solutions is in their interest and this action of theirs will take the performance of the mill to a very high level.

The serious support required from the authorities to stem the rot is presently not visible at the ground level. The mill association is also not making any serious attempt in the direction of improving the health of the mills. There appear to be a serious vacuum in this direction. For the long term survival of the re-rolling mills in the SME sector the following actions are required immediately.

• The present environment, in which the mills are operating, does not support that all the technological enhancements are carried out in one step. Small incremental short time based improvements will be more acceptable. After achieving success in the first step, then the second set of improvements needs to be taken up for their implementation.
• Mill association should play an active role for overcoming the fear element and the inertia which is presently preventing the mill owners to opt for change from the present way of working. There is necessity for the mill association to form a full time cell of 3 to 4 experienced professional people along with a budget for active guidance of the mill owners.
• A massive drive is required from the authorities, regulatory bodies, and government agencies in the form of training workshops, short seminars, presentations, distribution of attractive posters, arrangement of quiz and other contests etc. for the improving the awareness and the knowledge base in the sector. This drive is to be taken up at a very nominal cost to the mill owner.
• Bureau of Indian standards (BIS) is needed to take up on a massive scale an exercise to educate mill owners regarding the advantages of standardization and necessity of product certification. Instead of enforcing the product certification, BIS should create an environment, where mill owner themselves realizes the benefits and voluntarily accepts the product certification.
• Government should come forward with some package schemes which the mill owners find attractive for making investments in technology upgradation.
• Since multiple ministries are involved in the proposed exercise, it is necessary that Ministry of Steel should take a lead and co-ordinate the activities. In this regards mill association and ministry must work as a team.